REPORT: How The Senate Bill Compares To Other Reform Legislation

The Congressional Budget Office analysis of the recently released Senate health bill has concluded that compared to the Senate Finance Committee’s bill, the merged legislation makes a stronger contribution towards deficit reduction even though it includes (among other things): 1) more affordability credits for middle class families and a public option, 2) a strong individual requirement to purchase coverage, 3) and a lower threshold for the excise tax on so-called Cadillac health plans. An increase in the payroll tax for individuals/families earning $200,000/$250,000 makes up for the loss in revenue from the excise tax, while the later implementation date (the bill moves the start dates for the individual mandate, exchanges, and employer penalties from July 1, 2013 to January 1, 2014) helps increase the deficit savings in the merged legislation.

Despite these changes, the merged bill still lowers health care spending over the long term. The legislation establishes an Independent Medicare Advisory Board (IMAB)– which is required to “recommend changes to the Medicare program to limit the rate of growth in that program’s spending” — and places a 40% excise tax on insurers that offer expensive policies. While the budget office did not analyze the affect of the legislation on national health expenditures, the CBO is predicting that spending per Medicare beneficiary would decrease, as compared to the growth rate of the past two decades (from 8% growth rate to 6% growth rate). As a result, the federal government would be spending less on health care in the decades following the initial 10-year window, despite the expansion in coverage.

Below is an examination of how the merged Senate bill evolved from the Senate Finance Committee’s proposal:

Here is how the merged Senate bill compares to the legislation passed in the House. The merged Senate legislation has lower affordability standards, covers less people, invests less in prevention, does not require all large employers to provide health insurance, and includes a weaker public option. But the bill goes further in controlling health care spending and reducing the deficit: